Staff Training Tax Deduction in Singapore: EIS Training Claims, Course Subsidies and Training Bonds

Short answer: A Singapore company can deduct course fees it pays for employees as a normal business expense. If the course is eligible for Skills and Workforce Development Agency (SWDA) funding and aligned with the Skills Framework, the Enterprise Innovation Scheme allows 400% in total on the first S$400,000 a year, from YA 2024 to YA 2028.

When your company pays for an employee’s course, certificate or professional qualification, four questions follow: can the company claim a staff training tax deduction in Singapore, is the fee taxable in the employee’s hands, which government subsidies reduce the bill, and can you get the money back if the employee resigns soon after? This guide answers each one using current IRAS, SWDA and MOM guidance.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

Is staff training tax deductible for a Singapore company?

Yes. IRAS lists staff training among deductible business expenses, so course fees a company pays for its employees are deductible at 100% if they meet the usual test of being wholly and exclusively incurred in producing the company’s income.

The general deduction rules sit in sections 14 and 15 of the ITA. In practice, the expense must be incurred (the legal liability to pay has arisen), it must be revenue rather than capital in nature, and it must have a business purpose. A course that improves how an employee does their job normally meets this test; a hobby class with no business link does not.

How does the EIS boost the staff training tax deduction in Singapore?

Under the Enterprise Innovation Scheme, a business that spends money on qualifying courses for its employees gets an extra 300% deduction on top of the 100% base deduction, for a total of 400% on the first S$400,000 of qualifying training expenditure in each YA from YA 2024 to YA 2028.

The key conditions, from the IRAS EIS page, are:

• The course must be eligible for SWDA funding and aligned with the Skills Framework. IRAS points employers to its list of eligible courses at go.gov.sg/eis-training.
• Qualifying training expenditure means course fees paid by the employer, either directly or by reimbursing the employee, to an SWDA-funded course provider. Certification and assessment fees count.
• The enhanced deduction is computed on the fee net of any government grant or subsidy received for the course, including SkillsFuture Enterprise Credit (SFEC).
• The fee is treated as incurred when the training provider issues its invoice, even if the employee attends at a future date. Only training attended within the course’s supporting period qualifies.
• No EIS benefit is given on any part of a reimbursement that relates to fees the employee paid with their own SkillsFuture Credit.

Spending above S$400,000, and all other training costs such as travel, accommodation or courses that are not on the eligible list, still get the normal 100% deduction. Our EIS guide covers the other qualifying activities, such as R&D and intellectual property.

How do course subsidies, SFEC and the EIS fit together?

Subsidies come off first, then SFEC, and the EIS deduction applies only to what the company actually bears. The order matters, because claiming the 400% deduction on the full list price is a common error.

SWDA course fee subsidies are deducted automatically when you register the employee, so you pay the nett course fee plus GST to the provider. The rates published on SWDA’s OurWorkforce portal are:

For the enhanced SME rates, the business must be registered or incorporated in Singapore and have no more than 200 employees or annual sales turnover of no more than S$100 million. After the subsidy, an eligible company can use SFEC to offset up to 90% of the out-of-pocket nett fee (excluding GST). SFEC criteria change from 1 December 2026; see our note on what changes when SFEC resets.

Here is how the numbers flow for an illustrative Tier 2 course with a full fee of S$2,000, attended by a Singapore Citizen employee of an SME that does not use SFEC:

1. Full course fee: S$2,000.
2. Less SWDA subsidy at up to 70%: S$1,400. Nett fee paid: S$600 (plus GST).
3. Qualifying training expenditure for the EIS: S$600, the net amount after the government subsidy.
4. Total deduction at 400%: S$2,400 (S$600 base plus S$1,800 enhanced).
5. Alternatively, the company could convert the S$600 into a cash payout at 20%, which is S$120, instead of claiming the deductions on it.

Can the company claim Absentee Payroll as well?

Yes. Absentee Payroll (AP) funding helps with the salary cost while the employee is away on an SWDA-funded course, and IRAS confirms it does not need to be deducted from your EIS training claim, because it is not a subsidy of the course fee.

For Singapore Citizen, PR and LTVP+ trainees, AP is a fixed S$4.50 per hour of attended training, capped at S$100,000 per enterprise per calendar year. Employees under Workfare Skills Support can attract 95% of hourly basic salary, capped at S$13 per hour, subject to further criteria. The employee must finish the course before you can claim. Our absentee payroll funding guide walks through the claim.

Is a course paid by the company taxable for the employee?

Usually not. IRAS treats subsidies for course fees, staff development training fees, examination fees and scholarship awards as not taxable if they are part of training provided by the employer and the benefit is open to all staff.

The IRAS training benefits table adds some limits:

The practical step is to put the company’s training policy in writing and make it open to all staff to apply. If you agree to pay for one person’s MBA as a thank-you for a good year, that looks like a reward and is likely to be taxable. Our guide to tax on employee benefits and Appendix 8A explains how taxable benefits are reported.

Can the company claim GST on course fees?

A GST-registered company can generally claim the GST charged on staff training as input tax, because IRAS regards training that improves employees’ job skills as having a close link to the business.

GST is charged at 9% by GST-registered training providers. The IRAS e-Tax Guide on GST and fringe benefits makes two points that matter here:

• If the invoice is in the employee’s name, for example because the employee enrolled personally, IRAS allows the company to claim the GST as an administrative concession, provided the company reimburses the employee and records the cost as a business expense. A partial reimbursement allows only a proportionate claim.
• Where only specific people, such as directors, may attend a course, input tax is still allowed if the course is relevant to the business.

The same invoice and payment records support the input tax claim, the income tax deduction and any EIS claim.

Can you make an employee repay course fees if they leave?

Many employers use a training bond, a clause in the employment contract or a separate training agreement under which the employee agrees to stay for a set period after the course or repay some or all of the fee. Whether a bond can be enforced depends on its wording and the facts, so treat the points below as general principles only.

• Agree it in writing before the course starts, with the course, the cost, the service period and the repayment amount spelled out.
• Link the repayment to the cost the company actually bore. A sliding scale that reduces the amount for each month served is easier to justify than a fixed sum unrelated to the real cost. A court may decline to enforce a sum that operates as a penalty rather than a reasonable recovery of cost.
• Say what happens in different exit scenarios, such as resignation, dismissal for misconduct and retrenchment.
• Do not assume you can simply deduct the amount from the final salary. MOM’s guidance on allowable salary deductions limits what employers covered by the Employment Act may deduct, and states that employers must not deduct salary for items such as liquidated damages.
• Keep the bond separate from any non-compete. Restrictions on working for others raise different issues, covered in our article on restraint of trade.

If an employee leaves and disputes a bond, or you are drafting a bond for a large sponsorship such as a degree, speak to a lawyer about the wording before relying on it. For hiring and Work Pass matters, our sister site Singapore Employment Agency can help.

What records should the company keep?

Keep a simple file per course:

1. The approved training request or policy that shows the course is open to staff and relevant to the role.
2. The provider’s tax invoice and proof of payment, or the employee’s receipt and your reimbursement record.
3. Evidence that the course was on the EIS eligible list and attended within its supporting period, if you claim the 400% deduction.
4. Grant, subsidy and SFEC records, so that the EIS amount is computed net.
5. Attendance or completion records, which also support Absentee Payroll claims.
6. The signed training bond, if any.

These records feed into the company’s tax computation for Form C-S or Form C. RCS prepares Form C-S and Form C-S (Lite) filings from S$350 and Form C filings from S$700, as published on our packages page. Our free tools help with other compliance deadlines.

Frequently asked questions

Can a sole proprietor claim the EIS on their own course?

No. IRAS treats a sole proprietor’s own training cost as a private expense. The EIS training deduction is for qualifying courses attended by the business’s employees.

Can we claim the EIS if the employee did not finish the course?

IRAS says a business may still claim the EIS cash payout on fees for an employee who was absent or did not complete the full course, as the business incurred the cost. Absentee Payroll, however, needs the course to be completed.

Can the employee claim Course Fees Relief on fees we paid?

No. Course Fees Relief was discontinued from YA 2026, with YA 2025 the final year of claim, and it never covered amounts paid or reimbursed by an employer.

Who can opt for the EIS cash payout instead of the deduction?

Among other conditions, the business must make CPF contributions for at least 3 local employees for at least 6 months in the basis period. The minimum qualifying expenditure is S$400, and companies must apply by 30 November.

Last reviewed: 21 October 2026. The Editorial Team, Raffles Corporate Services.